1

School Finance

Presented By:

Vermont School Boards Association

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Key Assumptions

Connection between per pupil expenditure and homestead tax rate

Taxes will be paid on the lesser of either income or property value for 75% of residents

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Getting Started

Board clarifies expectations for education programs

Board identifies increase taxpayers may support and states this to administrators

Administrators develop budget to deliver programs within board parameters

Leadership team decides financial implications of the budget

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ORGANIZATIONAL FILTERS

ETHICS/VALUES

ROLES/RESPONSIBILITIES

VISION/MISSION

POLICY/PROCEDURE

STRATEGIC PLAN

ACCOUNTABILITY

DE

CIS

ION

MA

KIN

G

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CORE VALUES

Adults and students will take responsibility for their actions.

All members of the school district will behave and be treated in a professional and respectful manner.

All members of the district must learn and understand their respective roles and responsibilities.

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CORE VALUES

The district will clearly define and communicate its vision, mission, and objectives.

The district will focus on outcomes and the achievement of its intended goals.

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ROLES & RESPONSIBILITIES

Effective boards focus time in 6 areas: Represent community:

Two-way communication Listen and reflect Advocates for public education

Establish the expected results: the district exists to make a difference- board determines what that difference looks like for students

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ROLES & RESPONSIBILITIES

Effective boards focus time in 6 areas (con’t): Establishing limits for district

operation Hires superintendent to achieve

results Governs own process as board Monitors and is accountable to

community

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VISION & MISSION

Must make Vision & Mission living documents: Identify Measurable Outcomes

Identify Indicators of Progress

Agree Upon Targeted Timelines

Require Appropriate Feedback

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POLICY & PROCEDURES

Clearly articulate policies and procedures

Establish a renewal cycle

Review VSBA model policies on the web site – www.vtvsba.org

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STRATEGIC PLAN

Communicate&

Feedback

How Do We Get There?

SetObjectives

Establish Time Frame

Where WeWant To Go?

ConductS.W.O.T.Analysis

Examine DistrictIdentity

How DidWe GetHere?

Where AreYou Now?

Involve Bds.Admin.& Staff

Measure, Adapt, &Renew

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ACCOUNTABILITY

There is no substitute for achieving results

Explicit feedback mechanisms to outline how the school district is achieving its mission and vision and whether or not its performance is satisfactory

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Connecting Strands

Link from budget to: Core Values Vision and Mission - Active Strategic Plan

Accountability Feedback Target Activities Monitoring Process

Act 68 Overview

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Education Fund

General Fund

Money In

Lottery Sales Tax

HomesteadProperty Tax

Non-Resident/Business

Property Tax

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Education Fund

Bethel

Bennington Barre

Brattleboro

Bristol

Money Out

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Education Fund

Homestead Tax Money In

Grand List and CLA

OtherSources

Legislature

BaseRates

Bristol voters

Per PupilCost

Act 68

BaseAmount

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Sources of Vermont School Revenues

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Cost Drivers

Programs Regular, SPED, Tech. Ed.

Functions Processes and Activities Student and Staff Support

Objects Salaries, Benefits, Materials

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Annual Health Insurance Increases

0

5

10

15

20

25

2000 2002 2004 2006

% Increas

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Annual Special Education Increases(K-12 Service Plans)

0

2

4

6

8

10

12

2000 2002 2003 2004 2005 2006

% Increase

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School Spending Patterns Change(Personal Income Growth 4.7%)

Annual Education Spending PercentI ncrease from Prior Year

6.60%

5.98%

5.41%

4.37%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

FY2005 FY2006 FY2007 FY2008

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Education Fact Sheet

9-Year Average Annual Change in Education Spending Per Pupil

0.024 0.024

0.015

0.032

-0.007-0.01

-0.005

0

0.005

0.01

0.015

0.02

0.025

0.03

0.035

FY1998 Spending Quintile

Lowest 2nd 3rd 4th Highest

Demonstrates Equity Between High and Low Spending Districts

75% of Budget is Fixed by the Negotiated Contract

Options for Substantial Cost Reduction: Eliminate Programs Increase Student/Teacher Ratio

VSBA Negotiations Resources

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Password Information

UserID: “VSBA8”

Password: “2008”

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Northern Vermont

•Base Salaries

•Bachelor Highest Salaries

•Master Base Salaries

(This is base salaries)

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Per Pupil Spending & Equalized Tax Rates

Per Pupil Spending & Equalized Tax Rates

0.87

0.97

1.07

1.17

1.27

1.37

1.47

7,736 8,236 8,736 9,236 9,736 10,236 10,736 11,236 11,736 12,236 12,736

Per Pupil Spending

Eq.

Tax

Rat

e

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Movement in Tax Amounts

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

Tax Bill Based on $150,000

Housesite

2004 2005 2006 2007 2011

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Equalized Pupil Weights Weight Scale Scaled

Weight

Elem. (PreK-6) 1.0 0.910 0.91

Sec. (7 – 12) 1.13 0.910 1.028

Elem. Poverty 0.25 0.910 0.228

Sec. Poverty 0.2825 0.910 0.257

English Learners

.20 0.910 0.182

Student Enrollment Trends

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Montpelier School Enrollment ProjectionsYearly Projection Lines

600

650

700

750

800

850

900

950

1000

1050

1100

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2011-12

School Years

Oc

tob

er

En

rollm

en

t

Fall 2003

Fall 2004

Fall 2005

Comparison of Actual to ProjectedFall 2005

Increases in Grades K, 3, 10, 11, 12Decreases in Grade 4 and 9

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Excess Spending Threshold

FY 2008 - $12,594

FY 2009 - $13,200(est.)

(Statewide avg. of $10,660 increased by 25%)

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Interactive Budget SpreadsheetBudget $ 12,000,000 Base Amount $ 7,736

Changes $ 46,000 Common Level of Appraisal 100%

Total $ 12,046,000 VT Homestead Rate $ 0.87

- Revenue $ 200,000 VT Non-Residential Rate $ 1.36

Act 68 Expenses $ 11,846,000

Equalized Pupils 1113.25 Income Sensitivity

Act 68 Per Pupil Cost $ 10,641 House Site Value $ 180,000

Residential Tax Rate $ 1.20 Household Income $ 76,000

Non-Residential Rate $ 1.36 Calculated Property Tax $ 2,484

Prior Year Per Pupil Cost $ 9,053 Act 68 Benefit $ 330

Act 68 per pupil change 17.5% Actual Property Tax $ 2,154

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2008 State Tax Rates

Homestead tax rate = $0.87

Non-resident & business tax rate = $1.36

School budgets do not impact non-resident and business tax bills

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Non-resident Tax Rate

CLA impact same as homestead tax rate

Fund raising doesn’t help any more – No financial advantage for benefactor

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Non-Resident CLA Impact

$1.36 Non-Resident & Business(No income sensitivity provisions)

Town A (90% CLA) adjusted tax rate $1.36/0.90 = $1.51

Town B (80% CLA) adjusted tax rate $1.36/0.80 = $1.70

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Eligibility for Income Adjustment

2007 tax return $90,000 or less based on entire house site value

Income over $90,000 eligibility based on first $200,000 of house site value

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Income Sensitivity

Homestead income less than $90,000 -

Tax credit subtracted from school tax bill Based on 2007 income and FY 2009 school

budget

Homestead income less than $47,000 of total tax bill Combined municipal and adjusted school tax

must not exceed 5% of income

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Equalized Tax Rate = $1.17 CLA = 85% Tax Rate on Bill = $1.38% of Household Income 2.23%

Amount Tax

2007 House Site Value As Listed

$127,500 $1,759

2007 Household Income $50,000 $1,115

Reduction applied to following year FY 2009 tax bill

$644

Example 1 - $10,404

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45

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Town Rebates and Prebates

http://www.state.vt.us/tax/pdf.word.excel/pvr/reports/2007/

TaxAdjustmentSummary_PrebatesAndRebates.pdf

Income Sensitivity Web Resources

What is CLA?

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Common Level of Appraisal

Common Level of AppraisalTown grand list divided by the

state equalized grand list

Used to equalize property values and resulting tax burdens throughout the state

Statewide average CLA 82.39%

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Effect of CLA on Tax Rates

If CLA Is Increase Tax Rate By

95% 5%

90% 11%

85% 18%

80% 25%

75% 33%

70% 43%

65% 54%

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Under Act 130 Homestead tax collected by town

Elem. & secondary districts each have own tax rates (don’t avg. rates)

Districts determine ed. spending per pupil Based on grade range of district Prek -12, K-6, 7- 12, 9-12, etc.

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Under Act 130

Union districts are recognized

All districts will determine education spending per equalized pupil

All districts will have a homestead tax rate

Town’s homestead tax rate – weighted average of district tax rates

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Homestead Tax Rate for Bedrock

Town of Bedrock

60% of eq. pupils are members of Bedrock Elementary District

40% of eq. pupils are members of Mudville Union High District

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Homestead Tax Rate for Bedrock

Bedrock Elem. tax rate = $1.40

Mudville Union High tax rate = $1.55

60% of 1.40 = 0.8440% of 1.55 = 0.62Bedrock tax rate = 1.46

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Homestead Tax Rate for Milton

100% of equalized pupils in Milton are members of Milton School District

Milton School District tax rate = $1.26

Town of Milton Homestead tax rate = $1.26

What Do Voters Get for Their Tax Dollars

Show Me the Goods!

Link the budget to measurable goals as well as student and school accomplishments!

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Action Plan

Student performance data

Target areas needing improvementProfessional developmentNew curriculum

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Tracking Student Performance

Assessment scores Graduation rates Achievement of students

with special needs Higher education/post

secondary enrollment

NSBA Data Connection

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Tracking Student Performance

Salary levels for graduates Awards & recognition

received Scholarships received Participation in AP courses

NSBA Data Connection

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Other Student Performance Indicators

Community service & co-curricular activities

Graduate & parent satisfaction surveys

Attendance/drop out rates

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School Indicators

Student/teacher ratio Teacher expertise & awards % of parents involved Number of community

volunteers Types/# of business

partnerships

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Comparative Web Data

State School Report Data http://crs.uvm.edu/schlrpt/

cfusion/schlrpt06/vermont.cfm

Comparative School Data http://education.vermont.gov/

new/html/pgm_assessment/data.html#necap

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Starting the Budget Development

Process

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Getting Public on Board

6 Months Prior to Vote Involve key opinion leaders on

budget committee

Do not spend public funds promoting budget passage

Just communicate facts

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Getting Public on Board

3 Months Prior To VotePrepare budget

Prepare voting process

Organize PR Committee

Communicate with local opinion leaders